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The SelfWealth Ltd (ASX: SWF) share price is down 11.96% to 40.5 cents this morning after the company announced its fourth quarter results.

SelfWealth is an emerging share trading platform in Australia, offering a flat $9.50 per trade regardless of trade size.

How did SelfWealth perform?

The SelfWealth share price is facing selling pressure this morning despite achieving growth across a number of key reporting metrics.

SelfWealth was pleased to report quarterly operating revenue of $5.11 million, its second-largest quarter on record.

Its revenue growth was underpinned by continued growth across key operating metrics including active traders, client cash and securities held on the platform.

During the quarter, SelfWealth grew its active traders by 9,195 to 95,189, representing a 105% increase on a year-on-year basis.

Total client cash held in Australian dollar cash accounts cruised to a record high of $523 million.

In response to the record cash balances, SelfWealth said this could “suggest that retail investors are somewhat wary of the high valuations in the market at present and have taken some cash out of the market in anticipation of better opportunities in the future”.

In addition, total securities held on Holder Identification Numbers (HIN) continued to trend higher to $5.86 billion, up from $5.15 billion at the end of March.

The company said that growth in securities held on the platform was propped up by the market as well as new clients transferring their securities onto the SelfWealth platform.

However, it’s worth noting the company experienced negative quarter-on-quarter growth in terms of number of trades executed by clients. June quarter trade figures came in at ~357,000, down from a high of ~514,000 in Q3 FY21.

SelfWealth said that “this was in line with an overall drop in equities trading across the ASX”.

In addition, the company said it began implementing a more “aggressive marketing strategy” in the June quarter. As well, it says it’s strengthening its management team with newly appointed CFO Mandy Drake and key hires in technology and product streams.

What did management say?

SelfWealth CEO Cath Whitaker commented on the company’s performance:

“SelfWealth continues to experience double-digit growth in the number of active traders, and our member base is highly engaged with significant new customer acquisition growth from referral channels. We are very pleased that in a quarter with lower market volatility globally, our client base increased, and the cash balances and value of their HIN based securities on the SelfWealth platform grew strongly. Recent diversification of revenue streams has seen US brokerage and Foreign Exchange revenue and increased subscription collections assist in delivering a healthy revenue number for the quarter.

What does SelfWealth have in store for FY22?

SelfWealth announced a number of exciting product and technology plans for FY22.

The company said it is currently negotiating with multiple cryptocurrency exchanges with plans to roll out a new cryptocurrency product in Q2 FY22.

Furthermore, SelfWealth is looking to add additional international markets, including Hong Kong, for its investors. Additional international market options are expected to be available in Q3 FY22.

Unfortunately, the positive news today was unable to inspire investors with the SelfWealth share price tumbling almost 12% to a 13-month low of 40.5 cents.

The post SelfWealth (ASX:SWF) share price dives 11% after fourth quarter results appeared first on The Motley Fool Australia.

More reading

• Why the BHP share price is charging higher on Monday
• The Santos (ASX:STO) share price is having a rough month
• What’s the outlook for the Woodside (ASX:WPL) share price?
• Wesfarmers (ASX:WES) share price rises on API takeover offer
• Healius (ASX:HLS) share price higher on acquisition and rebrand news

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The BHP Group Ltd (ASX: BHP) share price has been a strong performer on Monday morning.

At the time of writing, the mining giant’s shares are up almost 4% to $51.33.

This leaves the BHP share price trading within sight of its record high of $51.82.

Why is the BHP share price charging higher?

The BHP share price has taken off on Monday following an equally strong night of trade for its US-listed shares on Friday night. The Big Australian’s NYSE-listed shares rose 4% on Friday after US markets raced to record highs.

Also giving the BHP share price a boost was a positive night for a number of key commodities that the mining giant produces.

One of those was oil. According to Bloomberg, the WTI crude oil price rose 2.2% to US$74.56 a barrel and the Brent crude oil price rose 1.4% to US$75.55 a barrel. Traders were buying oil after US inventories declined.

Base metals also performed positively on Friday. According to CommSec, the copper price lifted by 2.1% and the nickel price rose 2.4%. This was driven by news that China has loosened its lending requirements for financial institutions to boost its economic recovery.

And while the spot iron ore price softened by 0.8% to US$214.08 a tonne, this is still significantly higher than BHP’s cost of production.

Can its shares climb even higher?

One leading broker that believes BHP shares can still climb higher from here is Macquarie Group Ltd (ASX: MQG).

According to a note from late last month, the broker has put an outperform rating and $63.00 price target on its shares.

Based on the latest BHP share price, this implies potential upside of almost 23% over the next 12 months excluding dividends. This stretches to over 30% if you include the dividends that Macquarie expects from BHP over the period.

The post Why the BHP share price is charging higher on Monday appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Australian Pharmaceutical Industries Ltd (ASX: API) share price is trading higher this morning.

At the time of writing, the pharmacy operator’s shares are up 18.34% to $1.36 apiece. Unfortunately for shareholders, Australian Pharmaceutical shares have underperformed the S&P/ASX 200 Index (ASX: XJO) by 18.5% over the past year.

Let’s find out what’s moving the API share price today.

What’s moving API shares on the ASX?

Wesfarmers launches API offer

Shares in ASX-listed API are soaring in early trade this morning following a non-binding offer from Wesfarmers Ltd (ASX: WES). The offer is to acquire 100% of API’s shares outstanding for $1.38 cash per share by way of a scheme for arrangement. This represents a 21% premium to the company’s last close price of $1.145 per share on Friday.

Speaking on the announcement, Wesfarmers Managing Director Rob Scott said:

If the Proposal is successful, API would form the basis of a new healthcare division of Wesfarmers and a
base from which to invest and develop capabilities in the health and wellbeing sector. The combination of Wesfarmers and API is a compelling opportunity to capitalise on API’s strengths and
positioning in these markets while drawing upon Wesfarmers’ capabilities in retail and distribution, our strong
balance sheet and our willingness to invest in our businesses for growth over the long term.

API’s major shareholder, Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) holds 19.3% of the total shares outstanding in the pharmacy chain. The investment company has elected in favour of the proposal and has granted a call option in respect of its API shares in favour of Wesfarmers.

The deal will remain subject to due diligence, entry into the deed, ACCC clearance, API board and shareholder approvals.

Review prompts refocus

In addition to the Wesfarmers bid, the company announced its decision to increase the focus of the company on its pharmacy distribution and two retail businesses, Priceline Pharmacy and Clear Skincare. The outcome follows the completion of a strategic review conducted by the company.

As a result, ASX-listed API plans to discontinue the manufacturing of personal care and over-the-counter products in New Zealand. In its place, the company will seek to outsource its manufacture.

Furthermore, the company anticipates by moving to outsourced contract manufacturing, a lower cost of goods will be generated, in addition to a more consistent product supply. API noted that both had been affected by COVID-related impacts.

Looking at the financial impact of the decision – a net effect of $24.5 million at the earnings before interest and tax level is expected. This will be a one-off charge that contains the carrying value of plant and equipment; inventory; employee; and make good costs. Additionally, the decision to cease manufacturing is estimated to contribute positive cash of $9.7 million in the current year.

API Chief Executive Officer and Managing Director, Richard Vincent said:

By simplifying our operations and focussing on our two retail-facing businesses it will allow us to escalate our investment in our digital capabilities and accelerate the initiatives that will improve our customer experience in both our Priceline Pharmacy and Clear Skincare networks.

Mr Vincent also outlined that more details would be shared at API’s ASX Investor Day.

Lockdowns lead to forecast revision

In this morning’s announcement the pharmacy chain operator made known the impact of recent lockdowns. The lockdowns of June and July have resulted in the temporary closure of 72% of the non-pharmacy company-owned Priceline stores, and 75% of the Clear Skincare clinic network.

As a result, API’s previous forecast of $75 million in full-year underlying EBIT has been revised. Although, on a positive note the company was on track to achieve this number prior to the latest COVID implications.

Regarding the new forecast, Mr Vincent said:

On the basis that there is a relaxation of the existing COVID-19 restrictions in place including New South Wales by the end of July 2021 and no new restrictions between now and our financial year end on 31 August 2021, API now expects its full year underlying EBIT to be circa $66 million to $68 million, and its reported EBIT to be in the range of $31 million to $33 million (unaudited). In the event that the restrictions remain in their current form beyond the end of July the impact is a reduction of approximately $1 million in EBIT per week of extension.

Lastly, API revealed to the ASX its new Marsden Park distribution centre in North-West Sydney remains on time and within budget.

The post Australian Pharmaceutical (ASX:API) share price soars 18% on Wesfarmers bid appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company Limited and Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Santos Ltd (ASX: STO) share price has been sliding over the last 30 days, despite no news from the oil and gas producer hitting the market. However, we’ve heard plenty from its CEO and managing director, Kevin Gallagher.

Additionally, Santos shares are struggling while the price of oil is rallying and has been predicted to reach US$100 per barrel.

Currently, the Santos share price is trading at $7.18 – around 6% lower than it was this time last month.

Let’s take a look at what Gallagher has had to say about Santos’ business.

What Gallagher has been saying

Over the last 30 days, Santos’ boss has spoken on challenges facing energy producers in the age of climate awareness.

On 15 June, Gallagher gave a speech at the annual oil and gas industry (APPEA) conference.

Within it, he said investors have “turned off the taps” to western fossil fuel companies. He also claimed environmental, social, and governance (ESG) concerns make it difficult for energy producers to access capital.

There’s no direct link between Gallagher’s assertions and the Santos share price. However, it’s possible the comments may have made market watchers more aware of the modern challenges facing oil and gas producers.

Gallagher said:

Russia, Qatar and the OPEC producers know that the developed world will find it increasingly difficult to develop new oil and gas reserves. And they know that demand for oil and gas is not going to decline as fast as the world might want…

He also called for Santos’ peers to implement greater decarbonisation measures, saying:

Decarbonisation, through technologies like carbon capture and storage (CCS), and hydrogen production using natural gas, is critical.

Last week, Gallagher reiterated his belief in the importance of carbon capture and storage initiatives.

He also said that Australia is better suited to CCS than other nations, as its size and exhausted oil and gas fields are ideal for CCS initiatives.

Santos share price snapshot

Despite a poor month’s performance, the Santos share price has gained around 15% year to date.

It is also around 38% higher than it was this time last year.

The company has a market capitalisation of around $15 billion, with approximately 2 billion shares outstanding.

The post The Santos (ASX:STO) share price is having a rough month appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Woodside Petroleum Ltd (ASX: WPL) share price has had a topsy-turvy year in 2021. Shares in the Aussie energy giant have muddled along, climbing to $23.75 in early trading today, 1.32% higher than last week’s closing price.

So, what’s the outlook like for one of Australia’s largest listed shares right now?

The outlook for the Woodside share price

The Perth-based energy company’s primary focus is on oil and gas production across the globe. According to the company’s 2020 annual report, the vast majority of Woodside’s US$3,600 million operating revenue came from natural gas.

In fact, liquefied natural gas (LNG) delivered annual revenue of US$2,519 million or 73% of operating revenue during the 2020 financial year.

A look at forecast market dynamics for Aussie gas could help piece together the outlook for the Woodside share price. This is where the 2021 Gas Statement of Opportunities (GSOO) report by the Australian Energy Market Operator (AEMO) may help.

The 2021 GSOO report notably forecasts an “improved gas supply outlook compared to last year” which means more supply in the market and reduced capital investment to expand output capabilities.

According to the report, lower gas prices have contributed to a “challenging investment environment” for new production.

Another factor driving ASX energy shares right now is fluctuating crude oil prices. The Woodside share price has spiked 5.2% in July thanks to ongoing tensions in the OPEC+ oil cartel.

A continuing spat between large producers Saudi Arabia and the United Arab Emirates (UAE) has propelled Brent and WTI prices higher in recent days.

Higher base prices in both oil and gas would be welcome news for the Woodside share price. Increased commodity prices translate to higher company earnings (all else being equal) due to higher realised prices.

Analyst research can also be a useful analysis tool. A Goldman Sachs note on April 22 2021, sourced from broker CommSec, maintained the Woodside share price as a “Buy” with a $33.85 per share price target.

That update, which revised the target price down from $34.10 per share, noted Woodside’s strong spot LNG exposure with upside risk to commodity pricing through the remainder of 2021.

Foolish takeaway

COVID-19 has created uncertainty in global energy markets with difficulties in accurately forecasting future demand. The Woodside share price has climbed 1.6% despite this uncertainty and is sitting 15.1% shy of its 52-week high.

Shares in the Aussie oil and gas giant are worth watching in 2021 with some analysts bullish on the ASX 200 share against the current backdrop.

The post What’s the outlook for the Woodside (ASX:WPL) share price? appeared first on The Motley Fool Australia.

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Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Wesfarmers Ltd (ASX: WES) share price is pushing higher on Monday morning.

At the time of writing, the conglomerate’s shares are up 1% to $58.54.

This leaves the Wesfarmers share price trading just a fraction short of a record high.

Why is the Wesfarmers share price rising?

The catalyst for the rise in the Wesfarmers share price this morning was news that the company has finally found a takeover target. According to the release, that takeover target is pharmacy chain operator and wholesale distributor Australian Pharmaceutical Industries Ltd (ASX: API).

Wesfarmers has made a non-binding, indicative offer to acquire 100% of the Priceline Pharmacy owner for $1.38 cash per share by way of a scheme of arrangement. This represents a 21% premium to Australian Pharmaceutical Industries’ last close price of $1.145 per share and values the company at $687 million.

Positively for Wesfarmers, Australian Pharmaceutical Industries’ major shareholder, Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), has agreed to vote in favour of the proposal. It has also granted a call option in respect of its 19.3% stake in favour of Wesfarmers.

The proposal remains subject to the satisfaction of limited conditions precedent. These include the completion of due diligence and obtaining clearance from the Australian Competition and Consumer Commission (ACCC).

The Australian Pharmaceutical Industries Board has responded by advising that it is undertaking an analysis of whether the proposal is reflective of its long-term growth prospects and the expected short-term impacts of the pandemic-related lockdown restrictions.

Why Australian Pharmaceutical Industries?

Wesfarmers notes that Australian Pharmaceutical Industries operates a portfolio of complementary wholesale and retail businesses in the growing health, wellbeing and beauty sector. It believes it is well-positioned to bring capital and unique capabilities to strengthen its competitive position and its community pharmacy partners.

Wesfarmers’ Managing Director, Rob Scott, commented: “If the Proposal is successful, API would form the basis of a new healthcare division of Wesfarmers and a base from which to invest and develop capabilities in the health and wellbeing sector.”

“The combination of Wesfarmers and API is a compelling opportunity to capitalise on API’s strengths and positioning in these markets while drawing upon Wesfarmers’ capabilities in retail and distribution, our strong balance sheet and our willingness to invest in our businesses for growth over the long term.”

Mr Scott revealed that the company is a fan of Australian Pharmaceutical Industries’ community pharmacy model and intends to build upon it.

“Wesfarmers supports the community pharmacy model, including the pharmacy ownership and location rules, and considers API’s relationships with its community pharmacy partners to be one of its key strengths. We see opportunities to build on these relationships and invest to expand ranges, improve supply chain capabilities and enhance the online experience for customers. These investments are expected to strengthen the competitive position of API and its community pharmacy partners,” Mr Scott said.

The Wesfarmers share price has been a positive performer in 2021. Following today’s gain, the Wesfarmers share price is now up almost 14% since the start of the year.

The post Wesfarmers (ASX:WES) share price rises on API takeover offer appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company Limited and Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Healius Ltd (ASX: HLS) share price is on the move on Monday morning.

In early trade, the leading healthcare company’s shares are up 1% to $4.69.

This leaves the Healius share price trading within a whisker of a multi-year high.

Why is the Healius share price rising?

Investors have been bidding the Healius share price higher on Monday after it announced a new acquisition and rebranding.

According to the release, Healius has acquired Axis Diagnostic for an undisclosed fee. Management notes that Axis is a high-quality Queensland-based imaging business with operating earnings (EBITDA) of approximately $2 million.

It comprises three radiology practices located in growth areas near Brisbane and one practice in the Whitsundays.

Healius’ Managing Director & CEO, Dr Malcolm Parmenter, commented: “The acquisition is in line with our business’ network optimisation strategy, has been funded from cash and is EPS accretive. It complements and extends our existing footprint, grows revenue and capabilities, and delivers synergies with our facilities and national contracts.”

Rebrand

In addition to the acquisition, Healius has announced that its diagnostic imaging division, Healthcare Imaging Services and all its sub-brands, will be rebranding as Lumus Imaging. This will unify its imaging businesses under one national brand.

The release explains that the rebrand, with a new logo and colour scheme aligned to Healius, will see a stronger customer focus, improvements to the business’ online presence, and delivery of a more modern service.

Dr Malcolm Parmenter said: “Rebranding to Lumus Imaging supports Healius’ aim to be a customer centric healthcare business. In addition to refreshing our brand identity, we are updating our services, focusing on our digital capabilities and enhancing the way our business interacts with its patients and referrers.”

The rebrand will begin with seven sites across NSW and the ACT transitioning to Lumus Imaging in August. After which, the remaining sites across the country are expected to be completed over the next 18 months.

The Healius share price is up 24% in 2021.

The post Healius (ASX:HLS) share price higher on acquisition and rebrand news appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Vulcan Energy Resources Ltd (ASX: VUL) share price is on the move on Monday morning.

At the time of writing, the lithium explorer’s shares are up 5% to $8.79.

Why is the Vulcan Energy share price surging higher?

Investors have been bidding the Vulcan Energy share price higher today following the release of an announcement.

According to the release, Vulcan Energy has been granted a new exploration license for geothermal energy, geothermal heat, brine, and lithium in the Upper Rhine Valley of Germany for three years.

The company notes that the license covers a 108km squared area considered to be prospective for geothermal and lithium brine.

Vulcan Energy’s geological team now is reviewing existing data over the area, with a view towards future resource definition, and addition to the total mineral resource of the Zero Carbon Lithium Project, which is already the largest lithium resource in Europe.

From this resource, Vulcan Energy believes it can satisfy Europe’s needs for the electric vehicle transition with net zero greenhouse gas emissions for many years to come.

Management commentary

Vulcan Energy’s Managing Director, Dr. Francis Wedin, was pleased with the news.

He commented: “The unique experience of the GeoT team, now part of Vulcan, has been instrumental in identifying areas such as this which are prospective for geothermal lithium mineralisation in the Upper Rhine Valley.”

“The newly granted exploration license will form part of our plans to grow our unique Zero Carbon Lithium Project, driven by high customer demand and an increasingly widely-held industry view that combined geothermal energy and sustainable lithium projects will be the preferred choice of lithium chemicals supply for the automotive industry in the years to come, due to their unique ability to produce lithium with no fossil fuels and net zero greenhouse gas emissions,” he concluded.

The Vulcan Energy share price is now up 220% in 2021.

The post Why the Vulcan Energy (ASX:VUL) share price is surging higher today appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The share price of Australian retailer City Chic Collective Ltd (ASX:CCX) has been on a tear so far this year. Shares in the clothing company have already soared more than 25% higher in 2021 (opening today at $5.12).

This continues an impressive period for City Chic: since the COVID-19 selloff last March, City Chic shares have skyrocketed almost 400%, recently touching an all-time high price of $5.60.

Company Background

City Chic is a plus-size women’s clothing retailer, specialising in high street fashion for women with more natural body types. The company offers premium fashion choices – from shoes and dresses to lingerie and sleepwear – for women sized 14-24.

While still headquartered in Sydney, the company has significantly expanded overseas during the last few years.

Back in October 2019, City Chic acquired the eCommerce assets of US-based plus-size women’s retailer Avenue for US$16.5 million. Then, in December 2020, City Chic acquired the eCommerce and Wholesale assets of UK high street brand Evans for £23.1 million.

In fact, City Chic has been so successful overseas that 45% of its first-half FY21 sales came from the northern hemisphere.

What pandemic?

The company became an unlikely success story to emerge out of the pandemic after massive jumps in online and international sales sent its share price soaring.

Although retail was seen as one of the sectors hit hardest by lockdowns imposed throughout 2020, many companies with a strong digital presence actually saw a spike in sales. For example, online furniture retailer Temple & Webster Group Ltd (ASX: TPW) became a surprise COVID market darling after its FY20 revenues jumped a whopping 74% year-on-year.

City Chic also pivoted strongly towards online sales during FY20, supported by the – in hindsight, quite timely – acquisition of Avenue’s eCommerce assets. Online sales doubled in FY20 and accounted for 65% of all sales made during the year.

And that trend has continued into FY21. Online sales made up 73% of City Chic’s total first-half FY21 sales.

The company’s growing presence internationally also helped see it through the worst of the pandemic.

For example, City Chic’s FY20 sales dropped by 4.8% year-on-year in Australia and New Zealand due to COVID lockdowns. But a 179% surge in sales in the northern hemisphere (most of it online) meant the company still delivered overall top-line revenue growth of 30% for the year.

Recent Financials & Outlook

City Chic delivered strong interim FY21 results. Revenues increased by almost 14% (to $119 million) versus the prior comparative period and statutory net profit after tax jumped nearly 25% to $13.1 million.

Active customer numbers also continued to increase at a decent gallop, up 56% year-on-year to a touch over 800,000. City Chic didn’t commit to any firm earnings guidance in either its interim results announcement or investor presentation, but the company did hint that it was seeing continued strong sales growth over the second half.

City Chic also reiterated its short-term objectives, which included integrating the Evans brand into its UK portfolio and ramping up marketing investment to further drive customer growth.

The post Here’s why the City Chic (ASX:CCX) share price is up 25% in 2021 appeared first on The Motley Fool Australia.

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Motley Fool contributor Rhys Brock owns shares of Temple & Webster Group Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Shares in small-cap tech company LiveTiles Ltd (ASX: LVT) have shown some long overdue signs of life this month.

Since the beginning of July, LiveTiles shares have rallied almost 14% to $0.165, at the close of trade on Friday. But while the jump in share price will be welcome news for shareholders, it comes amid a disappointing period for the company. Even after the recent surge, LiveTiles shares are down over 30% so far this year. This is uncomfortably close to the 52-week low of $0.145.

Let’s take a look at the reasons behind LiveTiles’ disappointing share price performance – and see whether this recent jump might be the first sign of a turnaround.

LiveTiles background

But first, a little background information on the company.

Originally founded by two Australian tech entrepreneurs, LiveTiles has grown into a global software company headquartered in New York. It specialises in building engaging, interactive intranet portals for its business clients.

But this is no simple drag and drop intranet template. LiveTiles uses machine learning and artificial intelligence technology to enhance the user experience and create collaborative online workplace solutions. LiveTiles’ software uses data analytics to deliver insights that can be used to boost staff engagement.

Its workplace software has already won it some powerful friends. For example, it is a premier technology partner of multinational technology juggernaut Microsoft Corporation (NASDAQ: MSFT). This means that LiveTiles’ core software is capable of being deployed with Teams, Microsoft’s communication and collaboration platform. The two companies have also been involved in co-selling activities in at least 39 countries.

So why has LiveTiles been underperforming recently?

In some ways, LiveTiles underwhelming share price performance is a bit of a mystery. If you believe the news out of the company, it’s growing faster than ever.

In a letter to shareholders, released last year in response to the escalating COVID-19 pandemic, the company proudly spruiked the fact that the Australian Financial Review had named it Australia’s fastest-growing technology company.

And in its most recent financial presentation, for the quarter ended 31 March 2021, LiveTiles reported that, since the March quarter 2017, annualised recurring revenues had increased by over 500% (from just $8.5 million to $52.8 million). And yet, its share price now is lower than it was all the way back then.

Recent news

The reason behind the recent rally was likely the company’s announcement that it had inked a new deal with multinational food conglomerate Nestle. The deal is the largest yet for LiveTiles’ Europe, Middle East and Africa (EMEA) segment. The contract is for three years and should net LiveTiles at least $2.1 million in revenue.

Under the deal, LiveTiles will deliver a cloud-based employee experience platform. In the project’s initial phase, the platform will be rolled out to 125,000 users. But the goal will be to eventually have the platform used by Nestle’s global workforce of more than 300,000 employees.

LiveTiles financials and outlook

The Nestle deal continues a strong period for LiveTiles. The third quarter also included another record signing – a $3 million three-year deal with American healthcare and insurance company UnitedHealth Group Inc (NYSE: UNH).

While the company’s third quarter investor presentation didn’t include firm earnings guidance numbers for the remainder of FY21, it did hint that underlying business momentum remained strong. The company’s sales pipeline increased by 139% in the third quarter, and the company is continuing to focus on growth opportunities while keeping costs down.

Commenting on the company’s third-quarter results, LiveTiles co-founder and CEO Karl Redenbach said that he had, “confidence in the Employee Experience evolution, the breadth of this addressable and emerging market and the positioning of the LiveTiles strategy for success.”

The post The LiveTiles (ASX:LVT) share price is up 14% this month appeared first on The Motley Fool Australia.

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Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Rhys Brock owns shares of LIVETILES FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended LIVETILES FPO and Microsoft. The Motley Fool Australia has recommended LIVETILES FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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